The Prime Minister’s Employment Generation Programme (PMEGP) is a credit-linked subsidy programme initiated in 2008. Under PMEGP scheme, Government of India provides subsidy on several projects based on different criteria.
Objectives
The PMEGP has four-fold objectives:
1)To create employment in rural, as well as urban areas in India by setting up new self-employment micro-enterprises or projects.
2)To provide a common ground for the widely dispersed traditional artisans and unemployed youth in both rural and urban areas to come together and create self-employment avenues.
3)To take steps to prevent the migration of rural people to cities to seek employment by giving them stable and sustainable employment. This is especially for traditional and prospective artisans and rural and urban unemployed youth who get traditional or seasonal employment and remain unemployed the rest of the year.
4)To increase the income-earning capacity of artisans and focus on increasing the growth rate of rural and urban employment.
Subsidy and Funding under PMEGP
| Beneficiary Categories | Beneficiary’s Share (of Total Project) | Subsidy Rate (from Govt.) – Urban | Subsidy Rate (from Govt.) – Rural |
|---|---|---|---|
| General | 10% | 15% | 25% |
| Special | 5% | 25% | 35% |
The balance amount of the total project cost is provided by the banks as a term loan to the micro-unit entrepreneur. This term loan is more commonly referred to as a PMEGP Loan.
What is the Interest Rate charged by banks on PMEGP Loan?
The interest rate and subsidy offered under the PMEGP scheme from various financial institutions shall vary from bank to bank and shall depend upon the applicant’s profile, business stability, and project cost.
Loans under PMEGP can be availed by various eligible nationalised banks, such as SBI, Bank of Baroda, Canara, Bank of India, as well as other private and public sector banks and NBFCs.
Eligibility Criteria for loans under PMEGP
The PMEGP loan is given to individuals as well as other organisations that meet the specified criteria for such a term loan. The list of such eligible entities who can apply for loans under PMEGP is mentioned below:
1)Individuals must have passed at least Class VIII of schooling if they want to establish a manufacturing unit costing over Rs. 10 lakh or a service unit costing over Rs. 5 lakh.
Eligible Entities:
1)Self-help Groups (SHGs) & Charitable Trusts comes under eligible entities to avail loans under the PMEGP scheme
2)Societies that are registered under Societies Registration Act, 1860
3)Production Co-operative Societies
There are no income ceilings to avail loans under the PMEGP scheme. Loans are offered to new units and are not available for existing units established under PMRY, REGP, or any other government scheme. Moreover, any unit that has availed subsidy under any other scheme is not eligible for the PMEGP loan.
Documents required for Loans under PMEGP Scheme
The following documents are required when applying for a PMEGP loan application:
1)Duly filled application form with passport-sized photographs
2)Project report
3)Applicant’s Identity & Address Proofs
4)Applicant’s PAN card, Aadhaar card & VIII Pass certificate
5)Special category certificate, if required
6)Certificate of Entrepreneur Development Programme (EDP) training
7)Certificate for SC/ST/OBC/Minority/Ex-Servicemen/PHC
8)Certificate of academic and technical courses, if any
9)Any other document required by the bank or NBFC
or for PMEGP guidlines: click here